FAI Inquiry - Damning indictment of Golman Sachs

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    Have a look at the last paragraph of this news item. Sickening.

    http://www.abc.gov.au/news/justin/nat/newsnat-3may2002-45.htm

    Posted: Fri, 3 May 2002 11:50 AEST

    Shareholders never told of HIH's real value
    A former vice president of the investment bank Goldman Sachs has told the HIH Royal Commission he never considered telling the shareholders of FAI Insurance that he believed the company was worth about a tenth of its book value.

    Goldman Sachs had spent 10 months advising FAI's chief executive Rodney Adler in a private capacity about a plan to jointly privatise then sell the company.

    The plan was dropped in September 1998 when the bank determined FAI's net assets were worth $20 million, not the $220 million recorded in the company's accounts.

    The bank was then engaged by the company to prepare advice about HIH's takeover bid and recommended the shareholders accept the offer.

    Goldman Sachs vice president Russell Pillemer told the Commission he never considered if the shareholders might have been interested to learn of the bank's assessment of the company's true worth, because he was focussing his attention on preparing other financial information.
 
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